What is the Circular Economy?


The simple explanation is the Circular Economy is made up of three basic principles: (1) Waste-as-a-Resource; (2) Circular Business Models; and (3) Circular Design. Within these three basic principles is a much broader range of Circular Activities – on this page you will find a table showing the differences between Linear Economic activity and Circular Economic activity.

Since the Industrial Revolution (started around 1760) the economic model has progressed along a Linear system. The diagram below shows the three stages of the Linear Economy: (1) Taking finite natural resources [in the diagram it is oil to produce a plastic bottle] (2) Make or manufacture into products for consumption; (3) Becomes waste after use or end-of-life.

This economic model is not sustainable as, eventually, we shall use up all the natural resources we have and there will be nothing left for future generations.

In the Circular Economy nothing is wasted. Products are made from natural (biological) or man-made (technical) materials or resources and are recovered for reprocessing into new products, materials or alternative resources such as compost or bio-energy. To get to a point where nothing is wasted requires a major overhaul of our entire system of production and for this we need to explore how Circular Design will provide the innovation for change.

The Circular Economy Butterfly Diagram


In a Circular Economy both natural (biological) and man-made (technical) materials or resources circulate in infinite production cycles which is facilitated at the design and manufacturing stage of products – See Circular Design.

Technical materials: As fossil fuels, plastics, metals, glass etc come from finite natural resources they cannot be renewed. In the technical-cycle it is important we manufacture products to be ‘future-proof’. That is for maintenance, remaking, disassembly and recycling.  Or are designed in such a way for refurbishing, reusing or repairing. The aim is to keep all technical materials or resources in use for as long as possible.

Organic materials: Food, all organic materials from agricultural activity, water etc are part of a biological ecosystem. In this bio-cycle it is important to ensure that the ecosystem and biological processes are enabled to function properly. Consumption may take place in this cycle (food, water, fertilizer) as long as the material flows are not contaminated with toxic substances and ecosystems are not overloaded. When the ecosystem is balanced, organic materials are renewable.


The images of the Linear Economy and Circular Economy are from “Eriksen M, Thiel M, Prindiville M, Kiessling T 2018. Microplastic: what are the solutions? in Freshwater Microplastics – Emerging Environmental Contaminants (Eds Wagner M, Lambert S), The Handbook of Environmental Chemistry 58. Springer”. Note: Both images have been modified to reflect the Circular Economy in easier terms.